Key Points:
- More than half (53%) of surveyed retailers say delivery and fulfillment logistics pose a “significant” challenge to their business
- Container shortages have led to higher shipping rates plus delivery delays for merchants
- Keeping real-time visibility of your inventory helps you avoid costly and embarrassing issues like stockouts, which frustrate buyers and cause delays
Coordinating the complex operations involved in shipping and fulfillment has always been a mission for eCommerce brands. More than half (53%) of surveyed retailers say delivery and fulfillment logistics pose a “significant” challenge to their business.
Unfortunately, logistical issues have proliferated since the pandemic derailed the global supply chain. The logistics ecosystem remains out of sync, so it’s important to take extra steps to ensure your international shipping goes right.
Here are the international logistical issues to watch for in 2022.
Table of Contents
1. Delays and Cost Increases from Capacity Shortages
The pandemic shocked the global supply chain and the reverberations are still felt today. Most notably, the price of shipping container space has skyrocketed to record highs due to capacity shortages. The cost of a 40’ shipping container almost quadrupled in 2021 and continues to climb, according to the Wall Street Journal.
Driving the rate hikes are shortages in container space resulting from a major dislocation of shipping containers. Congested ports, labor shortages, and sporadic Covid-19 outbreaks in major shipping hubs have all reduced availability of containers. Further squeezing capacity is the soaring demand for space due to the ongoing boom in eCommerce.
Container shortages have led to higher shipping rates plus delivery delays for merchants. Freight companies have adjusted their policies in efforts to streamline operations, which can impact your shipping directly. A few considerations for freight shipping:
- Advance bookings: Book your container space 4-6 weeks before your target departure date or your shipment may be delayed.
- Try trucking: Truck freight is a cost-effective option to ocean freight for some companies, especially as prices continue to rise.
- Mandatory bookings: Some freight companies now require a booking to receive a rate quote for available space, given their shortages.
- Delivery delays: Carriers strapped for space are releasing just 1-3 containers per week, leading to staggered deliveries and delays for larger shippers.
Experts say these dislocations and the corresponding high prices will remain for the near term.
2. Unforeseen Disruptions
The pandemic exposed the shaky logistical foundations of many companies. It also highlighted the need for businesses to create a more resilient supply chain to guard against future disruptions.
For example, inclement weather is a notorious ‘X factor’ in logistics that routinely causes delays and leaves shippers scrambling for alternatives. Recent years have seen a troubling uptick in the frequency and severity of storms, wildfire and other natural disasters – and their impact on supply chains. For example, the 2020 wildfires in the Western US caused around $95 billion in losses.
Widening your network of logistics partners helps to mitigate risk from disruptions. Try to identify geographies and suppliers prone to risk, then explore alternative partnerships to compensate. If you only source inventory from China, for example, the recent Covid-19 outbreaks in the port of Yantian would have derailed your quarter. But if you source from India, you also had a solid fallback.
Similarly, your shipping and fulfillment partners are all worth backing up. With the US infrastructure bill approaching, ports and warehouses are set to experience some issues. Finding a reliable shipping company plus backup fulfillment warehouses will help you remain competitive despite any upheaval.
3. Customer-Driven Delivery
Today’s online shoppers expect fast and free delivery. The whole logistics industry is recalibrating to accommodate the demands of online shoppers weaned on Amazon’s same-day delivery. Most companies can't match Amazon for speed, but the consumer obsession with fast and free delivery has forced many in logistics to recalibrate their approach.
Companies are exploring new fulfillment strategies to accelerate the speed and efficiency of deliveries. Micro-fulfillment allows shippers to use a smaller network of warehouses instead of giant distribution centers to reach customers. This gives customers outside of urban centers access to fast delivery while cutting costs for shippers.
On-demand fulfillment is another new fulfillment strategy birthed by eCommerce. Companies can lease small amounts of warehouse space to service nearby customers for shortened periods like holidays or peak season. Fulfillment centers are splitting storage space into smaller chunks to share with more companies. With more warehouses going up around urban areas, on-demand fulfillment is a great way for companies to save and speed up deliveries at once.
For help finding trustworthy warehouse partners, get in touch with Easyship’s team of fulfillment experts.
4. Lack of Visibility
Items can be hard to track as they move from distribution centers to customers. Unfortunately, the modern shopper wants the ability to track packages right from checkout up to their doorstep. You can add transparency to your fulfillment flow with the right technology.
Managing Inventory
Keeping real-time visibility of your inventory helps you avoid costly and embarrassing issues like stockouts, which frustrate buyers and cause delays. Your inventory management system must integrate with your shipping platform, or you’ll be blind to the coming and goings of products and your actual inventory count. This is doubly true with return rates rising, which makes it even harder to know what’s in stock or sold.
Easyship functions as an inventory management and shipping system in one, giving you the real-time status of every shipment, order and item. Since Easyship also integrates with warehouse management systems, you’re also protected from warehouse management errors that lead to loss and delivery delays. This way, you can make optimal business decisions based on accurate information as part of a streamlined shipping system.
In-Transit Visibility
Customers want to track packages right away, but tracking often isn’t live until the package reaches the next distribution center from the warehouse. Easyship, though, integrates with leading warehouse management systems used by fulfillment centers. Because our platform talks with both couriers and warehouse platforms, you and your customers can track packages across the entire customer journey.
5. Inefficient Reverse Logistics
Reverse logistics is the process of returning items from the customer to be restocked and sold again. As eCommerce gains popularity, return rates have risen to 10.6%. Already strained by pandemic-related issues, fulfillment providers are struggling to process the crush of returns on behalf of their customers.
In the era of free returns, fulfillment centers are adapting to offer delivery plus returns logistics. Returns processing requires additional space and providers are expanding to bolster their capabilities. Capacity for reverse logistics is a must-have in a partner, as is expertise.
Your fulfillment partner must be efficient with returns, or you risk losing more money than already spent for return shipping. For example, the value of fashion apparel depreciates by 20-50% within 8-16 weeks, according to LogisticsMGMT. The urgency to translate a return into a resale highlights the need for trusted partners with both the capacity and experience for efficient returns processing.
Alleviating Logistical Issues with Easyship
Still reeling from the pandemic, the problems faced by logistics companies are many and varied. Catering to consumer behavior is a new priority in the logistics industry, which has historically been insulated from the whims of shoppers.
With returns rising and tracking expected, it’s important to partner with a robust provider who’s prepared to handle the new demands of your customers. Diversifying your supply lines and partner network will also help you avoid losses and delays in the case of new disruptions.
Easyship can help you connect with our trusted network of warehouses and fulfillment partners. It’s entirely free, just ask for help from our shipping experts.